Hello, and welcome to another episode of the Working Conversations podcast, where we talk all things leadership, business, communication, and trends in organizational life. I'm your host, Dr. Janel Anderson.

Imagine this. You've just hit submit on your PTO request. Your vacation is approved, and you're counting down the days to some much needed relaxation. But there is one thing holding you back. A nagging thought about the costs. Flights, hotels, meals. It all adds up.

Now imagine your employer steps in and says, not only will we pay you while you're away, we'll also help cover your travel expenses. Sounds like a dream, right? Well, this dream is a reality for some employees at companies that are offering what's called paid paid vacation. It's a rare perk, but it's deeply aligned with emerging trends in the future of work, where employee wellbeing is no longer a nice to have, but a competitive advantage.

Companies are asking new questions. How do we combat burnout in a hyperconnected world? How do we attract and retain top talent when remote and hybrid work blur the boundaries between work and the rest of our lives? Paid paid vacation may be one of the answers. And today we're diving into its history, its impact, and what it signals about the workplace of tomorrow.

So what is paid paid vacation? Well, let's start with the basics. Paid paid vacation is a benefit where companies not only provide paid time off, but also offer a stipend to help employees cover their travel costs. This could mean reimbursing flights, hotels, or even excursions like cruises. It's designed to encourage employees to actually take the time off because, let's face it, many of us have vacation days left unused. So what's unique about this benefit? Well, it shifts the focus from simply offering time off to ensuring that employees really do disconnect.

In an era where work emails and slack notifications can often follow us to the beach, a paid vacation stipend sends a powerful message. Not only do we want you to take time off, but we want to remove the financial barriers to make it happen. And then we want you to actually take the time off. No email checking on the beach.

Now, One of my nephews is a newly minted MBA. He recently got his master's in business administration, and he started his first job out of grad school earlier this year. His company offers paid paid vacation, so I got a chance to hear firsthand what he thinks of it and how it works at his company. And I will sprinkle his experiences in throughout this episode. So let's just look at a brief history of paid paid vacation.

The earliest instance of this benefit dates back to 2012, when bamboo HR introduced its paid paid vacation policy, offering employees up to 2,000 dollar annually to cover vacation expenses such as airfare and lodging. Now, since then, a number of other companies have adopted a similar policy, though it does remain a relatively uncommon perk. While many will associate paid paid vacation with those companies like Bamboo HR, its roots may stretch further back.

In fact, earlier examples, although hard to document, may exist in small employee centric organizations experimenting with unconventional perks. But what's clear about this idea is that it really did gain traction in the 2010s alongside broader workplace trends emphasizing mental health, employee experience and work life balance. At the same time, tech startups began competing fiercely for talent, offering unique benefits to stand out. And I've done an episode on office peacocking. If you haven't caught that episode, you might want to go catch that to find out what some of those other perks are that really do stand out from the run of the mill perks other companies are offering.

Now, paid paid vacation was one way to signal commitment to employee wellbeing and build that standout set of perks and employer brand, if you will. Now, how common is paid paid vacation? Well, here's the kicker. Unfortunately, paid paid vacation is quite rare. According to a benefits survey from the Society of Human Resource management, only about 2 to 3% of employers offer any sort of vacation stipend for their employees. And anecdotal evidence suggests that while the concept is growing, it is still far from mainstream. Why? Well, for one thing, it's expensive. Or at least there's the perception of the people who hold the purse strings that it is expensive. Covering travel costs for an entire workforce requires significant resource.

It sure does, especially if it's a large company. So it's often limited to companies with strong financial health or those competing in talent tight industries like tech and creative services. Now, if someone's salary is already six figures or approaching six figures, a few more thousand dollars to cover vacation, which has incredible benefits for the employee and the employer alike. But I'm getting ahead of myself here. Well, it's kind of a drop in the bucket. It's not that expensive, and maybe it's a very wise investment in retention. As we'll discuss later, the potential benefits may outweigh the costs, especially in a future where employee wellbeing is driving business success.

Now in my nephew's case, I asked him if it was a deciding factor in taking his job. In his case, it wasn't. He was thinking more about the job being a good fit for him again early in his career and wanting to be strategic about the position he was taking. The benefits package wasn't a huge factor in his decision making. Now, something like that very well may change over the span of one's career. In your 30s and 40s, you are more likely to be thinking about the benefits package and weighing that into decision making criteria about taking a job or not taking a job, whether it's employer contributions to a retirement account or the amount of paid time off you get, or whether or not there are extra perks like paid paid vacation. Again, I think those come maybe a decade or two later. But now let's get back to that idea about this being a benefit not just for employees, but there's an upside for employers as well. So let's get into that and talk about the why.

Why would a company pay you to go on vacation? And let me be clear, organizations that are offering paid paid vacation, they're not just writing you a check. You have to take the vacation and submit your expenses. And so they know that they're paying for your vacation, not just for you to sit at home on the couch for a week or to not take the vacation at all and just get some extra pay. You must take the vacation and submit your receipts. So why would a company pay you to do that? Well, the benefits for the employees are quite obvious. Financial support that's going to lower the barrier to taking a meaningful vacation. It may make the difference between taking a kind of purse strings vacation where you're couch surfing with your college buddies, versus actually disconnecting and really doing something that allows you to return to work more rested, energized and really mentally healthy. But what about the employer side? Well, this where, this is where it gets interesting.

Offering paid paid vacation can actually boost productivity because employees who genuinely take the break, again, not checking their email from the beach, but really, really truly go on vacation, well, they're more likely to come back with fresh perspectives, renewed energy and more creativity. So it really can boost their productivity. It is an intense enhancement of retention. So unique perks like this can really enhance loyalty amongst employees and particularly among younger workers who value experience over traditional benefits. This might give them the opportunity to do something like I'm Mount Kilimanjaro or you know, travel to Southeast Asia or someplace that they would otherwise never go if again they had to foot the whole bill. So it may enhance retention. I'll also talk about enhancing retention with older workers as well, those who have families or spouses or partners. It also is an attraction for top talent.

So in a competitive hiring landscape, especially like tech companies and creative services, benefits like this really do stand out and can make or break a candidate's decision to accept an offer or not, especially if they've got competing offers and one of the companies is offering these extra kinds of perks and the other isn't. Now, it also can reduce burnout, because when you're encouraging employees to really, truly step away and disconnect, companies can decrease that absenteeism and, you know, absenteeism where they're calling in sick when they're not really sick or they need to take the mental health day, that sort of thing. And it can also decrease their health care costs over time, both mental health and physical health, because they're getting the rest they need before stepping back into the workplace. Now, one interesting twist is that this benefit aligns with the growing emphasis on work life harmony rather than just simply balance. So harmony suggests integration, and I've talked about this before on the podcast as well. So instead of treating work and life as separate entities to balance, it's really about finding a rhythm where both your work and your life outside of work can coexist. And paid paid vacation embodies this philosophy, helping employees truly disconnect without financial stress. So does paid paid vacation reduce turnover? While direct data on this is incredibly scarce, there is a strong case to be made.

Companies that offer meaningful benefits often do see higher employee engagement, which correlates to lower turnover. Employees who feel cared for and appreciated are also less likely to jump ship for a competitor because when they feel that sense of appreciation and paid paid vacation is definitely a signal of appreciation, it prompts people to want to stay with that employer. Now, bamboo HR that I mentioned earlier, one of the pioneers of this benefit has cited that it is a key driver of their low turnover rates.

Similarly, companies like Airbnb and Afar Media, which also offer similar perks, report high levels of employee satisfaction and retention. Now, I've heard anecdotal secondhand data that spouses and family members of those who have paid paid vacation are apt to put the pressure on the person with the paid paid vacation perks to remain with that company. It makes vacation planning, especially for families, much more affordable. And it's likely to ensure that the spouse or the parent will more fully check out of work when they're on that paid Paid vacation, the person who actually gets the benefits. And that benefits the whole family as well as the employee themselves, as well as the employer.

Now, the underlying principle here that ties to the future of work is this. Employees expect more than just a paycheck. They want purpose, they want well being, and they want benefits that align with their values and demonstrate the company's appreciation for them. Now we must look at the downside. It is not all sunshines and rainbows. Implementing paid paid vacation comes with some specific challenges. So there is a cost that is first and foremost. And smaller companies might struggle to offer this perk without straining their budgets.

Or smaller companies might have an easier time of it because they have fewer people that they need to offer paid paid vacation to. If you've got 10 of thousands of people in your workforce, obviously those costs are going to add up and be quite significant. But if you think about it as part of the overall compensation package of hiring somebody, and you're factoring that in thinking of it almost as a part of their salary, then it's something that you can easily plan for and it does not have to become a strain on the budget. And the second thing you need to think about is policy design. There absolutely need to be clear guidelines in order to avoid misuse. As I mentioned before, companies that have paid vacation require you to use that money for getaways from work and, you know, like really disconnecting. So will the stipend cover family travel or just the individual's travel? Is it restricted to certain destinations? Those kinds of things need to be thought through.

Now, in my nephew's case, here are a few details of how it works. First of all, it's not available until you've worked at the company for at least six months. So once you've worked at the company for six months, it kicks in for the first year. And in the first year you get up to $1,000. And then not necessarily on the anniversary of your second year of employment, but once that first full year has kicked in. Now when you go into your second year, which could be close to two years with the company, it could be, it could be a little bit more than that as well, but then it kicks into $2,000 a year, and then on your third year, $3,000 and so forth, and it caps out at $5,000 a year in order to receive the benefit. My nephew explained, it's much like submitting an expense report. You have to fill out a form and then include your receipts and so forth. And then that money gets reimbursed to you, it also gets taxed.

So it's not just free money. It gets taxed like a bonus. Now, at some other companies, the stipend goes up to $7,500. And at other companies it is not quite as generous, capping out at more like $2,000. But really designing a policy around how can it be used, how must it be used and who is available to use it. Like can if, if you're married or partnered or have children, can your children or partners flights be covered as well, as well as hotel arrangements and so forth. So all of those details need to be ironed out and specified very clearly. And then you have to think about the cultural fit.

Now, not every workforce is going to value this benefit equally. Companies need to ensure that it's going to be something to res. That resonates with their employees. Because after all, it is expensive. Any way you slice it, it does add some cost. Let's make sure that that cost is not just a throwaway cost, but it's something that the employees would actually really find valuable. Now, despite these hurdles, companies that successfully implement paid paid vacation often find that the rewards absolutely outweigh the risks.

It's an investment in people and an investment in the future. Now, as for my nephew, he is using his first round of paid paid vacation to cover his flight to visit the rest of his family for the upcoming Christmas holiday. Now, as I thought through this process, I thought about myself being a young person and flying home to visit the family from, you know, my job on in a different part of the country. And that was definitely me. In my 20s, I lived in Boston and my family was in Minnesota. And so I was flying home to spend the Christmas holidays with them, much like my nephew is. And as I thought about my nephew's process compared to where I was at in my mid-20s with one of those first holidays home, I thought, you know, paid paid vacation makes it so much easier. He is not necessarily nickel and diming over which flight to take.

I remember being very, very intentional about choosing the flight that was like the least expensive without being a red eye or middle of the night kind of flight. And I think he probably doesn't have to nickel and dime himself that same way, knowing that his company is paying for the flight so he doesn't have to fly at an inconvenient time to get a better deal and so forth. And so I think in addition to the actual financial benefit, I think there is an element of stress that it takes off the table because you don't have to be quite so specific. You can choose something that suits your lifestyle better because you're not paying attention quite as much to the actual cost of the flight. Now that's in his case, he's using it simply to fly home to visit his family. He's not going on a fancy vacation with it or something like that. But he also does need to use it by the end of this calendar year because at his company, the benefit starts over at the beginning of the next calendar year. So after his first flight gets reimbursed, then starting January 1, he will have $1,000 to spend during that first full year of employment.

Then when he goes to his second full year of employment, it will bump up to $2,000 and so on. So that's how he's using it. And again, I think that there are some real intangible benefits to it besides the money itself. Just the pressure, the financial pressure that it takes off just with, you know, is the flight, does the flight cost, you know, $500 or does it cost $400? Well, it doesn't really matter if the company's paying for it and you just have to keep it under a thousand.

So what does paid paid vacation tell us about the future of work? Well, for one, it underscores the shift toward employee centric workplaces. The old model where employees traded their time for money is evolving. Thank goodness. Today's workers want more. They want a sense of belonging, they want well being, and they want to trust that their employers care about their lives outside of work. And they want that acknowledgement. And paid paid vacation offers all of that. Paid paid vacation also reflects a growing understanding of what makes employees thrive. It's not just about compensation. It's about creating an environment where people feel supported to bring their best selves to work and again, feel appreciated for the contributions that they're making now. As we look ahead, we may see benefits like this become more common. And I bet many of you listening today would wish that benefits like this would become more common.

Common and not just because they're nice to have, but because they are necessary for attracting and retaining top talent in a rapidly changing world. Companies that embrace these trends will likely lead the way. Proving that investing in employees is ultimately investing in their own success. So here's your takeaway. Whether you are an employee dreaming of a travel stipend or an employer considering bold new benefits, paid paid vacation is more than a perk. It's a glimpse into the workplace of the future.

All right, thanks for joining me on this episode of the podcast. If this topic resonated with you or you have an idea for future episodes, I would love to hear from you. And if your company offers paid paid vacation, please please drop me a note and share your experience. I'd love to feature your story on a future episode or your question on a future episode. Until next time, take care and remember, the future of work starts with how we care for ourselves and each other. And as always, stay tuned, stay curious, stay informed, and stay ahead of the curve. Tune in next week for another insightful exploration of the trends that are shaping our professional world.

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Keep thriving, keep working toward the future and stay connected. Stay curious. And again, I'll catch you next week.